Top-rated municipal bonds remained unchanged at mid-session, traders said, after the release of a better-than-expected employment report for November.
Municipal volume for next week is estimated at $7.83 billion, according to Ipreo, consisting of $4.94 billion of negotiated deals and $2.89 billion of competitive sales.
The yield on the 10-year benchmark muni general obligation was steady from 2.02% on Thursday, while the 30-year yield was flat from 2.97%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were stronger. The yield on the two-year Treasury fell to 0.93% from 0.98% on Thursday while the 10-year Treasury yield declined to 2.30% from 2.33% and the 30-year decreased to 3.06% from 3.07%.
Non-farm payrolls grew 211,000 in November, higher than the forecast for a 200,000 gain. The jobless rate held at seven-year low of 5%. The positive report raised the odds the Federal Reserve will vote to raise interest rates when it next meets on Dec. 15-16.
The 10-year muni to Treasury ratio was calculated on Thursday at 86.9% from 90.4% on Wednesday, while the 30-year muni to Treasury ratio stood at 96.8% compared to 99.8%, according to MMD.
Municipal Bond Funds See Inflows for 9th Week in a Row
Municipal bond funds reported inflows for the ninth straight week, according to Lipper data released on Thursday.
Weekly reporting funds experienced $364.051 million of inflows in the week ended Dec. 2, after inflows of $684.298 million in the previous week.
The latest inflow brings to 28 out of 49 weeks this year that the funds have seen cash flowing in. Flows for the year to date remain positive, totaling almost $4 billion.
The four-week moving average remained positive at $440.603 million after being in the green at $365.340 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also experienced inflows, gaining $111.303 million in the latest week, on top of inflows of $582.103 million in the previous week. Intermediate-term funds had inflows of $290.874 million after inflows of $149.157 million in the prior week.
National funds saw inflows of $373.795 million after inflows of $588.182 million in the prior week. High-yield muni funds reported inflows of $122.236 million in the latest reporting week, after an inflow of $256.845 million the previous week.
Exchange traded funds saw inflows of $33.226 million, after inflows of $108.446 million in the previous week.
The Week's Most Actively Quoted Issues
California, New York and Puerto Rico were some of the most actively quoted names in the week ended Dec. 4, according to data released by Markit.
On the bid side, the California taxable 7.5s of 2034 were quoted by 10 unique dealers. On the ask side, the New Jersey revenue 4 3/4s of 2038 were quoted by 16 dealers. And among two-sided quotes, the Puerto Rico commonwealth GO 8s of 2035 were quoted by nine dealers, Markit said.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Dec. 4 were in New Jersey, Puerto Rico and Texas, according to Markit.
In the revenue bond sector, the New Jersey Transportation Trust Fund Authority 4 3/4s of 2038 were traded 59 times. In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 were traded 55 times. And in the taxable bond sector, the University of Texas 3.78s of 2045 were traded 16 times, Markit said.
Primary Market
Traders were digesting the week's healthy new issue supply.
Leading the competitive pack this week were two separate sales of general obligation bonds from Massachusetts totaling $550 million.
Bank of America Merrill Lynch won the $400 million of consolidated loan of 2015 Series E bonds with a true interest cost of 3.69%. Morgan Stanley won the $150 million of consolidated loan of 2015 Series D bonds with a TIC of 3.09%. Both sales were rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
Morgan Stanley priced the Regents of the University of Michigan's $306.7 million of Series 2015 general revenue bonds. The deal was rated triple-A by Moody's and S&P.
RBC Capital Markets priced the Pennsylvania Turnpike Commission's $300 million of Series 2015B turnpike revenue bonds. The deal was rated A1 by Moody's and A-plus by Fitch.
Bank of America Merrill Lynch priced the Dormitory Authority of the State of New York's $252 million of Series 2015B dormitory facilities revenue bonds. The DASNY bonds were rated Aa3 by Moody's and A-plus by Fitch.
Wells Fargo Securities priced the Regents of the University of Texas' $118 million of Series 2016A tax-exempt permanent university fund bonds and the university's Series 2015C taxable permanent university fund bonds. Both series were rated triple-A by Moody's, S&P and Fitch.
Wells Fargo also priced the Metropolitan St. Louis Sewer District, Mo.'s $224million of Series 2015B improvement and refunding revenue bonds. The issue was rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
Morgan Stanley priced the Kansas Department of Transportation's $400 million of Series 2015B highway revenue bonds. The deal was rated Aa2 by Moody's, triple-A by S&P and AA-plus by Fitch.
BAML won the bidding war for the Maryland Department of Transportation competitive sale of $300 million of Series 2015, Third Issue, consolidated transportation bonds, with a TIC of 2.46%.The issue is rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
RBC Capital Markets priced the Ohio Water Development Authority's $210 million of Series 2015A water pollution control loan fund revenue bonds.
BAML priced the Delaware Transportation Authority's $213 million of Series 2015 U.S. 301 project revenue bonds. The deal was rated A1 by Moody's and AA-minus by S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,497 trades on Thursday on volume of $9.22 million.
